Human Capital Investment: Case State-Owned Banks and Sharia Banks

Abstract

The objective of study is to find the influence of company size, human capital investments, and leverage on financial performance. Case studies on State-Owned Banks and State-Owned Sharia Banks in Indonesia for the 2012-2018 period. The number of samples uses in the study were four State-Owned Banks and four State-Owned Sharia Banks in Indonesia. The samples of this study were the financial report that taken from the Indonesia Stock Exchange and the Indonesia Financial Service Authority with period 2012-2018. The analysis method for this research is linear regression methods, test of classic assumption, determinant coefficient, F-test, T-test. The findings show that the size and leverage variables have no significantly effect on financial performance in State-Owned Banks, while the human capital investments have a positive effect and significantly on financial performance. The results also show that human capital and leverage have no impact on financial performance in State-Owned Sharia Banks, but has size have significant effect on financial performance. Human capital investment was most variable that impact financial performance significantly in State-Owned Banks. Otherwise, size was the most significantly variable that effect financial performance in State-Owned Sharia Banks. The results show that the size and leverage variables have no significantly effect on financial performance in State-Owned Banks, while the human capital investments have positive effect and significantly on financial performance. The results also show that human capital and leverage have no significantly effect on financial performance in State-Owned Sharia Banks, but size have significantly effect on financial performance. Human capital investment is the most significant variable that influence financial performance in State-Owned Banks. Otherwise, size is the most significant variable that influence financial performance in State-Owned Sharia Banks.

An Analysis of Human Capital Development in Indonesian Islamic Banking System

“…However, previous studies have contributed to the present study to analyze and discuss the contemporary issue of human capital management as a fundamental source for further research and development (Rahajeng and Hasibuan, 2020). An effective research action enables to deliver a solution that significantly has a positive impact for resolve and identify problem objectively (Din et al, 2020).…”

“…Accordingly, there were several studies investigated these cases, those were Rahajeng and Hasibuan (2020) on intellectual capital in Shariah banks; Din, et al (2020) on human capital investment state own Shariah banks; Asri (2017) on the effect of human resources in Islamic banking; Huda et al (2016) on the human resource development in Shariah financial industry; Setianto et al (2016) on the intellectual capital and Islamic banks performance in Indonesia. The gap of existing studies on human capital management which are different from human capital development.…”

Investments in human capital in agriculture

“…According to [10], human capital is a stock of knowledge, health, motivation, skills, skills that bring income from the results of labor activity.…”